TRENTON — In response to the state Comptroller’s audit into the Economic Development Authority’s tax incentive programs, detailing nearly $11 billion in tax breaks awarded over 13 years with “little benefits” in return, over 70 New Jersey organizations joined to call on a full and transparent investigation, and a detailed accounting of the problems alluded to in the report. Furthermore, the 72 organizations from various stakeholder and issue advocacy areas stand united in a demand for the suspension of any new grants until adequate reporting and accountability measures have been adopted. According to the report, in a 13 year period, the EDA has granted over $11 billion in tax incentives, with close to $8 billion granted under the the Christie administration. Members of the Better Choices for New Jersey coalition have consistently decried the program, calling it corporate welfare at its worst, depleting the state’s coffers of critically needed revenue, making it harder for the state to meet its obligations and by extension a driving force behind the states economic woes; including 11 credit downgrades.
“Advocates and experts have understood that years of escalated tax incentive programs, combined with the elimination of tax obligations for the wealthy have left New Jersey unable to meet its obligations to its residents, young and old alike,” said Analilia Mejia, Director of New Jersey Working Families Alliance which convenes the Better Choices for New Jersey Coalition. “Now is the time to right these wrongs, and reform New Jersey’s tax incentive system in a real, thorough and transparent way.”
For years advocates have sounded the alarm against these tax incentive programs. In 2015 Better Choices for New Jersey called for a moratorium on major EDA programs. Over the years, the Better Choices have made multiple calls for legislation to increased transparency around economic incentives and questioned mass incentive announcements.
“For years, NJPP has been sounding the alarm about ballooning tax subsidies that favor already profitable corporations and produce questionable results for the state economy,” said Sheila Reynertson, Senior Policy Analyst at New Jersey Policy Perspective. “Given its already precarious fiscal health, New Jersey simply can’t afford to gamble away future revenue anymore. We agree with the Governor: It’s nuts. And it’s time for EDA reforms that reflect New Jersey’s financial reality and that respect New Jersey taxpayers.”
As budget season draws closer, Better Choices for New Jersey calls on the legislature to develop a budget that invests in itself and its people. Reforming the EDA as well as implementing revenue raisers such a true millionaire’s tax to a restored sales tax will give New Jersey a more opportunities to thrive.
Dear Member of the New Jersey Legislature:
The recent audit of New Jersey’s Economic Development Authority (EDA) and the programsit oversees paints a troubling picture of New Jersey economic incentive programs, the failures of self reporting, and the need for greater transparency and accountability atanagencyresponsible for billions of dollars. We write to urge you to pursue a full investigation and accounting of every penny that New Jersey and its taxpayers have forgone, and to support a transparent and open process for the revisioning or development of any future incentive program; from strong legislation to proper execution and sufficient oversight. Until the above is complete, no new proposals should be approved.
Comptroller Philip James Degnan’s report details practices thatwouldbeincrediblytroublingin any entity or corporation. The report states that, through the EDA’s various programs, New Jersey has forgone nearly $11 billion in taxes for the promise of job retention and growth. However, measures to oversee the proper disbursement of this exorbitant amount of taxpayer money were wholly lacking. Instead, there were poor practices including self reporting, insufficient monitoring, incongruous evaluation measures for approvals, and failure to comply with laws and procedures. For example, in a sampling of 37 projects that were awarded tax incentives, the Comptroller found that 1 out of 5 jobs created could not be sufficiently substantiated. New Jersey residents continue to foot the billwithlittleinbenefitstobeshownin return, all while companies gamed the system.
This budget season, New Jerseyans will descend upon the legislature and demand resources to fund ourschools,rebuildourroadsandprovideforthethingsthatcompriseagoodqualityoflife in the Garden State. No matter where you stand on the political spectrum, we should be in agreement that we must fix this egregious mistake and do right by taxpayers. First, we must immediately freeze the tax incentive program and issue no new awards untileverysinglepenny has been accounted for. Next, legislators and the Attorney General have an obligation to investigate why this happened and whether fraud or gross negligence was committed by the corporate entities and/or the EDA.
Most importantly, the EDA programs in the audit report are set to expire this year, providing a critical opportunity to enact the robust reforms that bolster accountability and transparency. For years, the experts and advocates in the Better Choices for New Jersey campaign have offered
common sense fixes and limitations on our corporate tax incentive programs to avoid austerity measures that would befall that state’s 9 million residents. It’s time to give them a serious and honest look.
Lastly, we demand greater public and open transparency in the creation of new legislation, absent of any backroom deals. We have the opportunity to reform our incentive programs to ensure they are transparent, accountable and actually create good jobs and real economic opportunities for New Jersey residents.Taxpayersandimpactedcommunitiesmusthaveasayin how these programs are developed and enforced.
32BJ, SEIU Action Together New Jersey, and 19 affiliate county chapters Anti-Poverty Network of New Jersey Amalgamated Transit Union, NJ State Council ATU Local 819 Newark ATU Local 820 Union City ATU Local 821 Jersey City ATU Local 822 Paterson ATU Local 823 Elizabeth ATU Local 824 Howell ATU Local 825 Oradell ATU Local 880 South Jersey ATU Local 1614 Dover Blue Wave New Jersey Clean Water Action CWA Local 1037 CWA Local 1081 David Pringle Associates LLC Environment New Jersey Essex Rising Greater New Jersey Pride at Work Housing & Community Development Network of NJ Hudson County Central Labor Council International Brotherhood of Teamsters,
Port Division IFPTE Local 194 Indivisible Cranbury Indivisible Congressional District 5 JOLT Ridgewood La Casa de Don Pedro Latino Action Network Laundry, Distribution, Food Service Joint Board, Workers United, SEIU Progressive Democrats of America, NJ Lutheran Episcopal Advocacy Ministry NJ Make the Road New Jersey NAACP Newark Chapter New Jersey Citizen Action New Jersey Education Association New Jersey Policy Perspective New Jersey Sierra Club New Jersey Tenants Organization New Jersey Working Families Alliance NJ11th For Change NJDSC Progressive Caucus Our Revolution Burlington Our Revolution Essex Our Revolution Ocean Our Revolution Monmouth Our Revolution Somerset Rutgers Newark College Democrats
South Jersey Women for Progressive Change STAND Central NJ
Westfield 20/20 Women for Progress Work Environment Council